Today, most people carry portable financial presentation devices such as credit cards, debit cards, prepaid cards, stored value devices and smart tag devices to pay for goods and services without using cash. All of these financial presentation devices have an account identifier (e.g., number) by which an individual device is uniquely identified. In the case of a credit or debit card, the account number typically has a 16 digit card number embossed on the card. The 16 digit number consists of an initial 6 digit Bank Identification Number (BIN), followed by a 10 digit number. The BIN identifies the issuer financial institution (e.g., bank), such as Bank of America®, Chase®, among others that issue credit cards. The remaining 10 digit number identifies a particular card issued by the issuer. Accordingly, the 16 digit number on the credit or debit card uniquely identifies a card, and therefore the cardholder.
Each issuer bank assigns an expiration date to the credit/debit cards. The expiration date is also embossed on the card and is set to expire at a predetermined time (e.g., four years) after being issued to the end-user (i.e., cardholder). Once the portable financial presentation device expires, it can no longer be used by the end-user to purchase goods and/or services from providers (i.e., merchants) of such goods and/or services.
Prior to the currently issued credit/debit card expiring, the end-user is issued a new card having the same 16-digit card number embossed on the card, but having a new expiration date embossed thereon. In some cases, however, the card number also may be different. The issuing financial institution sends (e.g., typically by mail) the newly issued credit/debit card to the cardholder's residence a predetermined period (e.g., approximately 10-20 days) prior to the expiration of their current card. The cardholder is provided with instructions to contact the issuing bank to activate the new credit/debit card, typically by telephone. Activation of the new credit/debit card requires providing the 16-digit card, among other identification and security information to the issuing bank, upon which the issuing bank authorizes and “activates” the new credit/debit card. Once the new card is activated, the cardholder can make purchases from any merchant that accepts the credit/debit card for business purposes.
Many merchants who provide repeated sales of services and/or goods to consumers also provide an automatic payment feature for the convenience of their customers/clients. One popular payment technique allows the customers to automatically provide payments for their purchases by using their credit card. For example, a cardholder who belongs to a health club can make monthly payments automatically by setting up an account with the merchant which automatically charges the cardholder's credit/debit card at a predetermined time (e.g., beginning of each month). In particular, the merchant's acquiring financial institution (e.g., acquiring bank) receives payment from the cardholder's issuing bank, and then forwards the payment to the merchant in a well known manner. Accordingly, the merchants consistently receive payment for their goods and/or services in a timely manner, and the cardholders do not have to be present at the point of sale to provide payment for each purchase.
As noted above, each cardholder's credit/debit card has an expiration date. Although the merchants know the expiration date for the current card, they will not know the expiration date for the newly issued card. Further, if the cardholder's credit card has expired prior to the next payment due date, the merchant will not know if the cardholder has activated his/her newly issued card. The newly issued card typically has the same account identifier, although the account identifier of the newly issued card can be different from the previously expired card. Accordingly, the merchant may be unable to charge the cardholder's credit/debit card for payment of the services and/or goods, since the merchant does not know the expiration date of the newly issued card as well as whether the newly issued card has been activated by the cardholder.
To avoid this problem, the processing facilitator (e.g., VISA®, MASTERCARD® and the like) provides an account update service that allows merchants to retrieve new account numbers, if any, and new expiration dates in a timely manner. Specifically, the issuers regularly send account update information (new account numbers, new expiration dates, etc.) to the processing facilitator. The processing facilitator stores the updated card information in an account database. When a merchant submits an account number of a card that is due to expire, the processing facilitator retrieves from the account update database, a new account number, if any, and a new expiration date of the newly issued card. However, even with this information, the request for charging a credit card may fail because the new card has not been activated by the cardholder.
As persons of ordinary skill in the art will appreciate, the merchants are placed in an undesirable circumstance of not being able to update their account data to timely charge the credit/debit card of a cardholder for a transaction if the newly issued card has not been activated. This idiosyncrasy can result in merchant dissatisfaction with the overall system because the authorization process becomes cumbersome, added expenses are required to obtain the necessary card information to process the transactions, and/or declines in sales revenues can occur due to the inability to expedite the sales transactions.
Therefore, it is desirable to provide a system and method for providing merchants with activation and expiration information for newly issued credit/debit cards associated with their accounts in an automated and timely manner to authorize and execute pending transactions.